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Between the Lines of the NBA Players Settlement

New Orleans Gabe Feldman, professor at Tulane Law School and head of the Sports Law Department, inaugurated the first Fair Grinds Dialogue (www.fairgrinds.com) with an excellent presentation of the legal issues that underpin the strategy and tactics in the recent NBA lockout as well as other sports labor issues. This may be one of the few situations where the 1% is part of a union (the players) engaged in “class” struggle against the 0.1% (the owners), but be that as it may the dialogue ended up being more about the issues of labor and unions than about the antics of LeBron James, Kobe Bryand, and Chris Paul.

Feldman has written extensively in law review articles about how the anti-trust laws vie for prominence with the labor law issue, and the questions were flying from the crowd as they tried to piece together how this created the battleground we all witness through the sports pages of the daily paper and ESPN. Feldman is a realist in his assessment of the contending power of the parties, and made no bones from the very beginning of his remarks, that now in pro sport negotiations, “the owners always win.” We are a long trek away from the early victories of sports’ unions winning the right to free agency and solid minimum player salaries.

The deal being ratified in the National Basketball Association (NBA) now as the union recertifies and the teams prepare to play again on the shortened season is another verse in that sad song. The players had been getting 57% of the revenue and now they have agreed to get between 49-51%, giving up $300 M per year, which is $1.8 billion over the minimum 6 year length of the agreement. Though players got some movement from owners on some “systems” issues that sweetened the settlement pill, there seems no doubt they lost a lot of ground. Indirectly, Feldman made the point that perhaps the real negotiations to continue to watch are the fights between the owners of the big market teams and the owners of the small market outfits like the New Orleans Hornets. The fight over a “hard cap” is at the heart of that contest, since the soft cap on salaries that will emerge under the agreement will still let players move, and if they are willing to lose money under this new agreement, it is even easier. Everyone in the audience seemed to agree that Hornets star Chris Paul is history in New Orleans. The Hornets could have given him $100M for 5 years and the best another team can do is $75 M. A star of Paul’s caliber and competitiveness knows that by moving to a bigger market team, he is likely to recoup what he might leave on the table in endorsements and the chance at a championship ring.

A lot of the discussion though focused on the differences between what labor law allowed and what anti-trust allowed. One interesting point made by Feldman is that the NBA Players’ Association might have hurt players’ unions by too transparently moving to decertify in a way that looked like a bargaining and leverage tactic. The risk to owners though in the NBA and in other sports including smaller enterprises like Arena football and soccer is that if a court ever did hold that there were anti-trust violations then the owners would owe the players triple damages, which would be very painful. The owners have tried to get around anti-trust requirements by saying (like the NFL) that they are single, commercial enterprises, rather than separate, autonomous teams that might be in restraint of trade. There argument falls apart when they won’t share revenues or open their books to each other, just as the players lose some of their standing when being or not being a union seems like a ploy.

Jerome Smith from Tambourine & Fan told a story with a poignant theme about how the head of the longshoremen’s union on the docks in his youth used to make sure they had clean water when they were playing near the tracks at the boundary line of what is now the Bywater and Faubourg Marigny, and how little the union or little people seemed to mean to a lot of the players now. Some of the professional sports bloggers in the audience were even harsher, wondering whether or not membership in the union itself was simply expedient and tactical, rather than principled and profound.

Two hours of great conversation left us much where we began. Feldman could not imagine a decisive test on the anti-trust argument in the near future, though in another 10 years he speculated that it could come in either hockey or basketball. And, even at the very top of the labor aristocracy represented by the players, none of us could see labor law reform happening anytime soon that would once again make the strike weapon of the workers equal to the force of the lockouts implemented by the owners.

There may be peace, but there seems to be no reason to expect justice anytime soon.